We present the estimated large-scale three-region DSGE model GEAR picturing Germany, the Euro Area and the Rest of the world. Compared to existing models of this type, GEAR incorporates a comprehensive fiscal block, involuntary unemployment and a complex international structure. We use the model...

In this paper, we assess the impact of major German structural reforms from 1999 to 2008 on key macroeconomic variables. By many, these reforms, especially the Hartz reforms on the labor market, are considered to be the root of observed imbalances in the Euro Area. Our simulations within a...

We simulate the fiscal stimulus packages set up by the German government to allevi-ate the costs of the COVID-19 pandemic in a dynamic New Keynesian multi-sectorgeneral equilibrium model. We find that, cumulated over 2020-2022, output lossesrelative to steady state can be reduced by more than 4...

In this paper, we analyze politicians’ expectations about future compliance with a fiscal rule, and in particular the dependence of the expectations on their role in parliament (opposition vs. incumbent government coalition). In addition, we explore how opposition and incumbent politicians...

In this article, we present a model that can account for the changes in the Germancurrent account balance since the 2000s. Our results suggest that an array of struc-tural tax and labor market reforms (Agenda 2010), population aging and pensionreforms led to an increase in the household savings...

By applying a Structural Vector Autoregressive (SVAR) approach this paper estimates the effects of fiscal policy shocks of different government sub-sectors on aggregate GDP in Germany. From a general government perspective, the results show that besides investment, it is particularly changes in...

We estimate a DSGE model for Brazil that includes both anticipated and unanticipated fiscal shocks. The model contains a relatively detailed public sector, which allows us to investigate the effects of anticipation for a much wider array of fiscal instruments than previously considered in the...

This paper analyses the international dimension of fiscal policy using a small open economy framework in which the government finances its spending by levying distortionary taxation and issuing non-state-contingent debt. The main finding of the paper is that, once the open economy aspect of the...

In Folge der starken Rezession kommt es durch diskretionäre Maßnahmen der Bundesregierung und die Auswirkung der automatischen Stabilisatoren zu einem erheblichen Anstieg des Staatsdefizits. Im Ergebnis wird das Niveau der öffentlichen Verschuldung bei Rückkehr zur wirtschaftlichen...

When is it optimal for a government to default on its legal repayment obligations? We answer this question for a small open economy with domestic production risk in which contracting frictions make it optimal for the government to finance itself by issuing non-contingent debt. We show that...